In
anticipation of expiration of the fifty-year license for the
Catawba-Wateree Project, Duke Energy Carolinas, LLC
("Duke Energy") filed an application with the
Federal Energy Regulatory Commission for a new fifty-year
license. The Commission, upon determining that construction
and environmental measures under the new license were
"moderate" in nature and scope, granted a
forty-year license. Duke Energy petitions for review,
contending principally that the Commission failed to treat it
like similarly-situated applicants that received fifty-year
licenses and announced a new qualitative approach to
determining license terms without prior notice or reasoned
analysis, leaving applicants and courts without objective
standards. According due deference to the Commission's
expertise in determining whether measures under a license are
moderate or extensive and to its interpretation of its
precedent and policy choices, we deny the petition for
review.

I.

The
Federal Power Act authorizes the Commission to issue licenses
for hydroelectric projects for terms of up to fifty years. 16
U.S.C. § 799. Upon expiration of a license, the
Commission may issue a new license for a term that is in the
public interest, but for not less than thirty nor more than
fifty years from the date it issues. Id. §
808(a), (e). The Commission generally issues a thirty-year
license term for projects with "little or no"
redevelopment, new construction, new capacity, or
environmental mitigation and enhancement measures; a
forty-year license term for projects involving
"moderate" measures; and a fifty-year license for
projects involving "extensive" measures. See,
e.g., PUD No. 1 of Chelan Cnty., 117 FERC
¶ 62, 129 at ¶ 128 (2006); PUD No. 1 of Pend
Oreille Cnty., 112 FERC ¶ 61, 055 at ¶ 127
(2005); Portland General Electric Co., 111 FERC
¶ 61, 450 at ¶ 167 (2005); N.Y. Power
Auth. (St. Lawrence), 105 FERC 61, 102 at
¶ 225 (2003).

The
Catawba-Wateree Project for which Duke Energy sought a new
license for fifty years includes eleven developments along
hundreds of miles of the Catawba and Wateree Rivers in North
Carolina and South Carolina. The original fifty-year license
was set to expire on August 31, 2008, and two years prior
Duke Energy entered into a Comprehensive Relicensing
Agreement with 70 entities that specified measures to be
undertaken upon relicensing. It filed the agreement with its
application for a new license. The Commission determined,
based on staff recommendations in light of public comments,
various filings, and a final environmental impact statement,
that under its general licensing policy the appropriate
license term was forty years. See Duke Energy Carolinas,
LLC, 153 FERC ¶ 62, 134 at ¶¶ 6-10, 277
(2015) ("License Order"). It concluded the
license authorizes "a moderate amount of new
construction (e.g., fish passage facilities and
bladder dam on the Wateree spillway) and new environmental
mitigation and enhancement measures (e.g., higher
minimum flow releases from [six developments]; recreation
flow releases from [five developments]; diadromous fish
monitoring associated with fish passage program, sturgeon
monitoring, and recreation development)." Id.

Duke
Energy requested rehearing, arguing the license should be
longer, claiming the Commission had failed to consider all of
the license measures and their costs and including with its
request a list of the measures required under the new
license. In addition to the costs of these measures, Duke
Energy stated it had spent about $54 million on new
construction to implement measures proposed in its August
2006 application and required by the Relicensing Agreement
before the new license issued, and had incurred $111 million
in costs pursuing relicensing. Duke Energy pointed to
instances in which the Commission had granted a fifty-year
license based on a project's annual cost and the impact
of costs on the total annual benefit of the project and
argued, based on its estimate of total and annual costs for
the Catawba-Wateree Project, that it was entitled to the
same. It also claimed the signatories to the Relicensing
Agreement had agreed to a fifty-year license term. The
Commission denied rehearing and affirmed the forty-year
license term. Duke Energy Carolinas, LLC, 156 FERC
¶ 61, 010 at ¶¶ 13-14 (2016)
("Rehearing Order"). Duke Energy petitions
for review.

II.

The
issue on appeal is whether the Commission reasonably found
that the measures required by the hydroelectric license it
issued to Duke Energy were "moderate, " warranting
a forty-year license term under the Commission's
precedents. "In a [hydroelectric] licensing decision
such as this, where few explicit statutory provisions govern,
[the court's] role is narrowly circumscribed."
U.S. Dept. of Interior v. FERC, 952 F.2d 538, 543
(D.C. Cir. 1992). The court will "defer to the
agency's expertise . . . so long as its decision is
supported by substantial evidence in the record and reached
by reasoned decisionmaking." Turlock Irrigation
District v. FERC, 786 F.3d 18, 25 (D.C. Cir. 2015)
(internal quotation marks and citations omitted).
Essentially, the court must "look to whether [the
Commission] 'articulated a rational explanation for its
action'" and either acted "consistent with . .
. or offer[ed] a reasoned basis for its departure from
precedent." Williams Gas Processing v. FERC,
475 F.3d 319, 326 (D.C. Cir. 2006) (quoting AT & T
Inc. v. FCC, 452 F.3d 830, 837 (D.C. Cir. 2006);
ConAgra Inc. v. NLRB, 117 F.3d 1435, 1443 (D.C. Cir.
1997)).

Duke
Energy's principal challenge to the License and Rehearing
Orders is that the Commission was arbitrary and capricious
because it failed to treat Duke Energy like
similarly-situated applicants with similar costly projects
that received fifty-year license terms and offered no
reasoned explanation for the disparate treatment. New
York Power Authority, 120 FERC ¶ 61, 266 (2007), in
its view, exemplifies the Commission policy of granting
fifty-year license terms for projects based on their costs.
There, the Commission re-licensed for a fifty-year term the
Niagara Project that spanned the Niagara River connecting
Lake Erie and Lake Ontario and that, pursuant to statute, has
"the capacity to use all of the United States' share
of Niagara River water available for power generation, "
New York Power Authority, 118 FERC ¶ 61, 206 at
¶¶ 4, 13 (2007); New York Power Authority,
120 FERC ¶ 61, 266 at ¶ 19 (2007).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Commission acknowledged that it "did use cost as a
significant part of its analysis [of the Niagara Project],
" but stated that its precedent "does not generally
treat cost as dispositive." Rehearing Order
&para; 14 n.17. For instance, in Consumers Power
Co., 68 FERC &para; 61, 077 (1994), the Commission
announced its general standard, stating it issues "new
licenses for [forty] years or more for projects which include
substantial new construction or capacity increases, " 68
FERC &para; 61, 077 at 61, 383-84, and observing that
"licenses of longer duration . . . ease the economic
impact of the new costs[, ] . . . encourage better
comprehensive development of the renewable power generating
resource[, ]" and ease the burden of "substantial
or costly environmental mitigation and enhancement measures,
" id. at 61, 384. But the Commission has not
interpreted this precedent to support a ...

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